Microeconomics Unit 1

Land

Natural resources used in the production process

Labor

Physical actions and mental activities people contribute to production

Capital

Human-produced physical objects and intangible ideas

Entrepreneurial Ability

The human resource that combines the other economic resources of land, labor, and capital to produce new products or make innovations

Scarcity

The limits placed on the amounts and types of goods and services available for consumption

Opportunity Costs

The amount of other products that must be sacrificed to produce a unit of a given product.

Budget Lines

Shows various combinations of two products a consumer can purchase with a specific income

Budget Line Graph

Budget Line Graph

Budget Line Table

Marginal analysis

comparisons of marginal benefits and marginal costs

Marginal

“extra” or “additional”

Market System

capitalism; mixes government actions with individual decisions. Markets and prices to guide economic activities

Command System

the government controls resources and plans the economy